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Everything you need to know before purchasing a condo as an investment property

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It’s no secret that having an investment property is a great way to build long-term wealth. And while there are many different types of investment properties one could purchase, condos are often a great option–especially for first-time investors. If you’re planning to invest in condos in the Hamilton area, you must contact a real estate agent to help you find the perfect condo for sale in Hamilton.

Before you start shopping around for the perfect condo to purchase as an investment property, here’s everything you need to be aware of before finalizing the deal:

A rental property requires maintenance

One of the things that you will have to do to preserve that value of your rental property is to keep up with maintenance. While the condo association is responsible for maintaining the common areas and exterior of the building, you will be responsible for maintaining the interior of your unit–and that includes things like appliances, HVAC, and plumbing.

When you have tenants, negligence in maintaining your rental property can lead to costly repairs down the line. In extreme cases, it can even result in personal injury to the tenant, which would result in a lawsuit.

Managing a condo as an investment property is different than managing a single-family home

If you’re used to managing a single-family home as an investment property, then you’ll need to make some adjustments when it comes to managing a condo. You will likely have to deal with a condo association–which means following their rules and regulations.

You will also need to be aware of the other tenants in the building and how they might impact your business. For example, if one of the other tenants is constantly causing a disturbance, it could reflect poorly on you as the landlord–even if you had nothing to do with it.

You will need to be aware of the building’s insurance policy and make sure that your tenants are adequately covered. If you aren’t sure how to manage the property on your own, there are plenty of condominium management companies that can help you with the process and do all of the hard work for you.

Renting out a condo comes with certain risks

While supplemental income can be helpful, it’s important to be aware of the potential risks involved in renting out your property. Since renting out your property to tenants can result in significant damage, you’ll want to make sure that your insurance policy covers any property damages that may occur while your condo is being rented out.

Since tenants have a tendency to come and go, you’ll also want to make sure that you have a solid lease agreement in place–one that protects you in the event of any damages or missed rent payments.

In order to find the right tenants, you will have to screen them thoroughly. You’ll want to check their credit score, employment history, and rental history to make sure that they will be able to pay rent on time and take care of your property. Since these risks can be tough to mitigate on your own, it is best if you don’t go into the rental property business alone.

Endnote

Purchasing a condo as an investment property is a big decision, but it can be a smart one if you’re aware of the risks and are prepared to handle them. By considering the tips above, you can be sure that you’re making a sound investment that will pay off in the long run.

Other articles from mtltimes.ca – totimes.ca – otttimes.ca

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